Markets heaved a sigh of relief as institutional support came for important stocks like ACC, Axis Bank, ICICI Bank, SBI and BHEL in Friday’s trading. IIP numbers which surprised the market also helped to boost the sentiment of the market. Key benchmark indices surged on the last day of the week as investors sought bargains after recent steep slide. Market breadth was strong in contrast with a weak breadth in early trade as many small and mid-cap stocks recovered after suffering steep fall in the past few sessions. ACC counter witnessed big block deals and as a result the stock gained by Rs.75 to close higher at Rs.1075. Movements on Nifty still continued to be volatile.
It is a bit early to conclude that the worst is over and one needs to assess the market closely in the coming days to get more clarity about the short term direction. However, the fact that bigger investors have started purchasing frontline stocks like OBC, Reliance, ACC and BHEL in a small way does gives hope that we are very close to the end of the process of bottom formation. Banking stocks like Axis Bank, OBC, Indian Bank chart structure in the lower time frame chart have started showing some signs of promise in the short term of a small upmove. Midcap and smallcap stocks still would need some more time to move up since recovery would initially will be restricted to frontline stocks. Hence, sticking to frontline stocks would be a prudent strategy in the current circumstances.
Nifty futures has strong support around 5850 and 5825 levels whereas it will face resistance around 5898 and 5930 levels.
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